Investing in real estate is one of the best decisions you can make; here’s why.

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Here are the top five reasons to make real estate a part of your investment portfolio:

1. People need a place to live. Now more than ever, we live in a transient world—people aren’t as committed to sticking with one job for many years as they used to be. On top of that, we have an upcoming generation that’s saddled with roughly $1.5 trillion in student debt, which makes it hard for them to purchase a home. They need places to live, but unfortunately, they may not be able to afford to make a down payment on a house.

2. You can generate passive income and build long-term wealth. Robert Kiyosaki, author of the book “Rich Dad, Poor Dad,” once said, “Real estate investing, even on a very small scale, remains a tried-and-true means of building an individual’s cash flow and wealth.” I’ve read this book myself and highly recommend checking it out. Some people get overwhelmed by thinking they have to buy 10, 20, or even 30 properties to be a real estate investor, but buying just one (or even converting your primary residence into a rental property) can make a tremendous amount of sense in terms of diversifying your portfolio.

3. You can manage your investment directly. If you’re like me and are a bit of a control freak, you’ll appreciate that you can have total control over the outcome of your real estate investment. You have final say over factors like the property’s upkeep, maintenance, etc., and how they all influence your bottom line. It’s the one investment you can control completely instead of leaving it in the hands of a board of directors.

“When evaluating a rental property, don’t forget that someone else is paying down your principal.”

4. You can use real estate as leverage. If you buy $1 million worth of stock, it will cost you exactly $1 million. If you buy $1 million worth of real estate and leverage it (especially now that rates are so low), it may only cost you $200,000 to $300,000. On top of that, if you pay off your mortgage completely and build enough equity, you can leverage your property to buy more property. I’ve done this with my rental properties, and it’s a great way to access more capital.

5. You can profit in multiple ways. Appreciation and cash flow are the two main sources of income, but principal reduction is another way you can benefit. When evaluating a rental property, don’t forget that someone else is paying down your principal, which leads to principal reduction over time. You can also profit from tax benefits, although this doesn’t apply to every investor. Be sure to speak with your tax advisor to see which tax benefits are available with your purchase.

I’m a big believer in real estate, so if you have questions about whether real estate investing is right for you or there’s anything else I can help you with, don’t hesitate to reach out to me. I look forward to speaking with you.